Audio McCarthyism Page 4
"The commissioner [of the New York Department of Consumer Affairs] is committed to the protection and education of consumers. Our office has jurisdiction over all print, radio, and television advertising distributed within New York City."
Lopez presented a legal explanation of what constitutes deception in advertising, quoting the New York Court of Appeals case of Guggenheimer vs Ginsburg. "In weighing a statement's capacity, tendency, or effect in deceiving or misleading consumers, we do not look to the average customer but to the vast multitude which the statutes were enacted to safeguard. That includes the ignorant, the unthinking, the credulous, who in making purchases do not stop to analyze but who are governed by appearances and general impressions."
Explaining his role in the advertising of loudspeaker cables and audio products, Lopez said that "advocates are mandated to protect the less than average consumer. We encounter very often in our investigations and our field work what we call 'blind items.' It is my opinion, after hearing the vast amount of terminology that flew right over my head, that [loudspeaker cables] may in fact be one of these blind items with which many consumers are not familiar. I would suggest that this industry [the audio engineering establishment] and those here today may pursue creating a well researched—with supportive documents—report on whether this is in fact a new technology or a new market strategy on how to sell a reconfiguration of the same product that has been offered for years and years.
"Simply put, the legal ramifications of false advertising is that you get in trouble [laughs]. We will contact you in a number of ways—those who would seek to advertise something that does not have the characteristics they claim, that will not give to a consumer a benefit which they state or imply exists."
Deceptive practices, Lopez continued, include "false implications of quality or characteristics of the item. In this case when comparisons of cables were being made as to whether a braided cable is better than a straight line cable or twisted cable—things of that nature. If one were to pump up unfairly the characteristics of their item and then advertise it that way where no benefit of that exists or the characteristic does not exist, we would find that deceptive."
He went on to define fraud as the "false disparagement of another's product...an advertiser can pump up the quality of his own item...however, if we find someone saying that a different product is not as good, does not contain qualities that it does, the false disparagement of another's product is actionable."
Lopez then broadened the criteria by which audio companies will be prosecuted by his office: "If you use terminology that flies over the head of the vast majority of consumers, then you are in fact unfairly compelling the consumer to contact the store and be sold.
"We license many stores and businesses in New York City and if we find that if those stores are trying to sell you a cable that is indeed heavier but not better [than another cable] but are stating that it is better and will benefit you greater than the other cable, we will take action against that store. They will be invited to come in and settle the matter and explore how they might change their business practices. We will draw up settlement documents in the form of an 'Assurance of Discontinuance' or a 'Consent Judgment Order' by which they agree to do or not to do certain things in their stores. It will also provide for a specific monetary penalty which we have found is the best incentive to follow the guidelines which we enforce." (his emphasis)
"For those licensees who cannot find it within themselves to agree with us, we will schedule an administrative hearing where an administrative law judge—being an impartial third party—will take testimony from the respondent and the investigator or any consumer who seeks to put in a complaint, and will render a decision which in fact may include a penalty. They will then have 30 days to appeal or satisfy that penalty. Their failure to do so may result—in the case of a licensee—in us showing up sometime unannounced and changing the locks on their doors. The store will then stay shut until all adjudicated penalties have been satisfied.
"With what we have been listening to here today, it appears to be an area which is really 'blind' to most consumers. We've encountered this in Persian rugs and Chinese rugs, which most people do not study up on. And people go in and they're told that this rug was produced in a certain year and is of a certain quality and it certainly is not. A lot of consumers are taken advantage of because of this.
"Therefore I implore those [AES] members here today and those people connected with this industry to draw out a proposed report of guidelines which to follow when it comes to these cables, stating clearly whether or not this is in fact reality or myth. Stating clearly what can be supported by documentation as far as claims go. Clearly stating what terminology means. Propose those to the Attorneys General for the individual states. I invite you to propose those to the Commissioner for the Department of Consumer Affairs; you can forward a copy of same to myself. Thereby we can both—industry and advocates—work together to protect consumers and protect the interests of business."
I have a lot to say about the implications of Mr. Lopez's position, but let's first hear some of the questions and statements from the audience that concluded the meeting. Bob Katz, engineer of the Chesky recordings, offered this observation: